Conventional (AIP) Submarine – a Weapon of Choice for the 21st Century

Dominik Kimla, Industry Analyst – Aerospace, Defence & Security

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ry Introduction

The potential implications of shifting US interests/military doctrine from the Atlantic to the

Pacific, and more specifically to South-East Asia, as well as the superpower ambitions of

China and its growing tension with neighbours demands a closer look from the global

security and defence industry. The US military solution for national security challenges from

the Asia-Pacific (APAC) region is the Air-Sea Battle strategy. In a potential worst-case

scenario, where the US Navy has to confront the Anti-Access / Area Denial operational

concept of its adversary(ies), Frost & Sullivan anticipates a significant role for conventional

submarines in the confrontation.

The modern non-nuclear, conventional diesel-electric submarine (SSK) with air-

independent propulsion (AIP) system is a complex, multi-role and extremely powerful

weapon system. The submarine is able to deploy a wide range of weapons such as:

torpedoes, anti-ship missiles, land attack missiles, mines, unmanned underwater vehicles,

self defence systems and even provide accommodation and support for a team of Special

Forces. Consequently, the vessel can conduct various missions from anti submarine, anti

surface vessels warfare through land strikes with cruise missiles to intelligence,

surveillance and reconnaissance operations. Therefore, modern SSKs can play the role of

a semi strategic weapon which will have a decisive effect on future air-sea battlefields.

Naval operations have changed significantly compared to the Cold War period. Operations

at sea have moved from the ‘‘blue water’’ open ocean to the ‘‘brown water’’ shallow, costal

environment. As a result, the importance of smaller and quieter conventional submarines

has significantly increased. The SSK will play an important role in the Anti-Access / Area

Denial operational concept of countries such as China, North Korea or Iran that aim to

block access to combat zones and increase their adversaries’ naval vessels' vulnerability to

lethal attacks.

On the other hand, detecting, tracking and locating SSKs is a challenging task, even for the

most advanced Navies. For instance, the US Navy has constantly struggled to effectively

detect diesel-electric submarines. In 2005, the Gotland Swedish AIP-equipped submarine

was leased with a crew to the US Navy. During a war gaming exercise with the USS

Ronald Reagan Carrier Strike Group on December 2005, the Swedish submarine

penetrated the defence of a carrier battle group and managed to “sink” the aircraft carrier,

while remaining undetected. Similarly, US vessels have often experienced such defeats at

the hands of the South Korean type 209 and 214 SSKs during the biannual Rim of the

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ry Pacific Exercises. These examples and other features discussed in this Market Insight

establish the modern SSK as a powerful adversary particularly in littoral warfare.

AIP A ‘Must’ Feature for the Modern Submarine

One of the key disadvantages of diesel-electric submarines is the snorkelling required to

charge its batteries, which exposes SSKs to passive and active counter detection sensors.

A partial solution to the SSKs’ Achilles heel is the implementation of AIP systems on the

submarine boards. The AIP comes from Hellmuth Walter's engineering genius and was

developed during the II World War. Right now, there are three AIP technologies on the

market – fuel cells, Stirling engines and MESMA (Module d'Energie Sous-Marine

Autonome).

Table 1: The most common AIP systems used by modern SSKs

Fuel Cell Stirling Engine MESMA

Shipbuilder Howaltswerke-Deutsche Werft GmbH

Kockums AB DCNS

Power (kW) 9x34 2x120

2x75 4x75

200

Advantages very quiet, low operating

temperatures, highly efficient,

low acoustic radiation, mature technology, low life-cycle cost

very quiet, high output power, no diving depth

limitation

Disadvantages the heaviest system, special refuelling infrastructure is

needed

relatively large size, operation to 200

metres diving depth

high oxygen and fuel consumption, relatively low

efficiency, noise gas management method

AIP increases the submerged endurance from days to weeks because it allows recharging

batteries without snorkelling. The system can extend the submerge mission period of SSK

three-fold, depending on the technology and mission profile. As a result, AIP offers

significant tactical advantages over standard conventional diesel-electric submarines that

are not equipped with the system. Another important feature of AIP is that the technology

can be relatively easily integrated into already operational standard submarines during

retrofit.

Although, the submerge endurance of AIP SSK cannot be compared with nuclear-powered

submarine as yet, the AIP technology is evolving rapidly and more reliable and powerful

Con

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AIP solutions can be expected within a decade. Consequently,

must-have capability for newly procured SSKs. Additionally, the through

AIP, in comparison to nuclear

times lower, not to mention the high cost related to deactivation of nuclear

submarines.

Due to all these factors, there is growing interest fro

build AIP SSK, especially from

According to Frost & Sullivan,

defence budget reductions in many countries,

mainly with AIP on board, will grow at a compound annual grow rate (CAGR) of 1.8 per

cent during 2013-2022, and present revenue opportunities of up to $34.80 billion to the

industry.

Figure 1: Conventional Submarines

2013

Africa 0.14

Asia-Pacific 1.49

Central Asia 0.27

Europe 0.72

Latin America 0.43

Middle East 0.15

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

($ B

illi

on

)

AIP solutions can be expected within a decade. Consequently, AIP system

for newly procured SSKs. Additionally, the through-life cost of SSK

AIP, in comparison to nuclear-powered attack submarines (SSN), is about three to four

times lower, not to mention the high cost related to deactivation of nuclear

Due to all these factors, there is growing interest from a number of countries to purchase or

from APAC.

Market Potential

According to Frost & Sullivan, despite the implementation of austerity measures and

defence budget reductions in many countries, the demand for conventional

mainly with AIP on board, will grow at a compound annual grow rate (CAGR) of 1.8 per

2022, and present revenue opportunities of up to $34.80 billion to the

Figure 1: Conventional Submarines, Market Size Forecast by ReGlobal, 2013-2022

2013 2014 2015 2016 2017 2018 2019 2020

0.15 0.15 0.14 0.14 0.15 0.15 0.15

1.52 1.55 1.61 1.65 1.65 1.67 1.75

0.27 0.27 0.28 0.28 0.28 0.29 0.29

0.73 0.75 0.75 0.81 0.78 0.79 0.80

0.44 0.44 0.45 0.45 0.46 0.47 0.46

0.15 0.16 0.16 0.17 0.17 0.18 0.19

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AIP system is seen as a

life cost of SSK

powered attack submarines (SSN), is about three to four

times lower, not to mention the high cost related to deactivation of nuclear-powered

number of countries to purchase or

implementation of austerity measures and

the demand for conventional submarines,

mainly with AIP on board, will grow at a compound annual grow rate (CAGR) of 1.8 per

2022, and present revenue opportunities of up to $34.80 billion to the

Market Size Forecast by Region,

2021 2022

0.15 0.15

1.77 1.79

0.30 0.30

0.82 0.83

0.47 0.48

0.19 0.20

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The North American market for SSK is anticipated to be near negligible over the forecast

period. Heavy reliance on nuclear

procured second-hand British

leaves limited or no market potential for new SSK in the region. However, Canada could

consider implementing AIP systems for their submarine fleet to increase operational

capabilities.

In contrast, the APAC and Europe seem

terms of the market size. It is expected that the SSK market in APAC will grow at a

of 2.1 per cent and will be responsible for 47.2

conventional submarines. The

growing ambitions and border disputes in the region.

process of expanding their underwater capabilities with stealthy SSK

the region are implementing submarine programmes: China (Yuan class), India (Scorpène

class and Project 75I), Japan (S

expected DSX3000 programme). Bangladesh

procurement plan further confirms the trend.

Figure 2: Conventional Submarines

Europe, with CAGR growth of 1.5 per cent

its status as the second largest SSK market

is the consequence of ongoing projects

22.4%

13.1%

Africa Asia-Pacific

The North American market for SSK is anticipated to be near negligible over the forecast

period. Heavy reliance on nuclear-powered submarines in the US, and the fact that Canada

hand British Victoria-class submarines at the beginning of the century

leaves limited or no market potential for new SSK in the region. However, Canada could

consider implementing AIP systems for their submarine fleet to increase operational

urope seem to be two the most attractive markets

the market size. It is expected that the SSK market in APAC will grow at a

and will be responsible for 47.2 per cent of the global demand

es. The high CAGR is reflective of the arms race fuelled by

growing ambitions and border disputes in the region. Further, APAC countries are in the

process of expanding their underwater capabilities with stealthy SSKs. All main

are implementing submarine programmes: China (Yuan class), India (Scorpène

t 75I), Japan (Sōryū class) and South Korean (Son Won-il U214 class and

expected DSX3000 programme). Bangladesh’s recent announcement on

confirms the trend.

Conventional Submarines, Cumulative Market Share Forecast by Region, Global, 2013-2022

with CAGR growth of 1.5 per cent and 22.4 per cent global market share, will retain

its status as the second largest SSK market. Stable demand for submarines from

consequence of ongoing projects that were implemented before the economic

4.2%

47.2%

8.1%

13.1%

5.0%

Central Asia Europe Latin America Middle East

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The North American market for SSK is anticipated to be near negligible over the forecast

powered submarines in the US, and the fact that Canada

at the beginning of the century,

leaves limited or no market potential for new SSK in the region. However, Canada could

consider implementing AIP systems for their submarine fleet to increase operational

to be two the most attractive markets at present in

the market size. It is expected that the SSK market in APAC will grow at a CAGR

per cent of the global demand for

the arms race fuelled by China’s

countries are in the

. All main Navies in

are implementing submarine programmes: China (Yuan class), India (Scorpène-

il U214 class and

announcement on a submarine

Cumulative Market Share Forecast by Region,

22.4 per cent global market share, will retain

for submarines from the region

were implemented before the economic

Middle East

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ry downturn. The most prominent ongoing SSK projects are underway in Germany and Italy

(Type-212), Greece and Turkey (Type-214) and Spain (S-80). Additionally, Sweden has

been developing its new submarine – A26 project, Norway is looking to replace its Ula class

SSK, and Poland wants to enter two modern AIP submarines into service by 2022. Thus,

Europe and APAC offer attractive prospects for the submarine markets during the forecast

period while the rest of the regions analysed, offer a modest potential.

Conclusion

The modern submarine (AIP SSK) is a very strong threat to any surface and submerged

adversary due to its tactical flexibility, stealth, small size, and the new operational

paradigms. Navies are increasingly looking to modern SSKs due to its multi-role capacities

and semi-strategic potential. Consequently, modern conventional submarines present

significant market potential for the submarine sector, both in terms of the sale of new boats

as well as the opportunities to retrofit standard SSK with AIP plug-in. The Pacific region has

the most heavy sea-lane traffic in the world, which needs to be constantly secured and,

therefore, will offer considerable market growth opportunities for submarine solutions

providers.

From the financial point of view, AIP SSK is about three to four times cheaper to procure

and operate when compared to nuclear-powered attack submarines. Therefore, in the long-

term perspective, even the traditional nuclear-powered approach of US Navy should be

taken under revision due to budget constraints. The potential of AIP SSK as an alternative,

for at least partial replacement of the Los Angeles class nuclear-powered attack

submarines, should be thoroughly assessed.

About Frost & Sullivan

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